December 17, 2003
Federal prosecutors have charged the marketers and sellers of Girls Gone Wild videos and DVDs with deceptive practices for allegedly charging consumers credit and debit cards without consent.
The complaint seeks civil penalties for violations of previous Federal Trade Commission (FTC) determinations, a charge that carries a civil penalty of up to $11,000 per violation.
The complaint names California-based Mantra Films and its sole officer and director, Joseph R. Francis.
The Commissions complaint alleges that since December 2000, Mantra and Francis deceptively marketed "Girls Gone Wild" videos and DVDs to consumers, automatically shipped these unordered videos and DVDs to consumers, and charged consumers for them without consumers consent.
The defendants enrolled consumers who responded to Internet and television advertising for a single video or DVD into programs called continuity programs. Once consumers were enrolled in these programs, each month the defendants allegedly shipped additional unordered videos and DVDs on a negative-option basis, charging consumers credit and debit cards for each shipment until consumers took action to stop the shipments.
According to the complaint, the defendants advertising failed to tell consumers how the continuity programs operated, failed to obtain consumers express consent to be enrolled, and did not give consumers an effective means to cancel their membership once they were enrolled.
In a case of deceptive marketing gone wild, consumers were enrolled in a program of monthly deliveries without their knowledge, said Howard Beales, Director of the FTCs Bureau of Consumer Protection. Thats out of bounds. If you sign consumers up for an ongoing plan without their permission, we'll do our best to unwind the transaction.
The Commissions complaint charges defendants Mantra and Francis with violating the FTC Act, the Electronic Fund Transfer Act, and the Unordered Merchandise Statute. The complaint also charges the defendants with violating previous Commission determinations that shipping unordered merchandise and sending communications that seek to obtain payment for or return of merchandise shipped without the expressed consent of the recipient are unfair and deceptive acts or practices and are unlawful.
Specifically, it alleges that the defendants:
- failed to disclose adequately that the purchase of a video/DVD results in enrollment in a continuity program, and the material terms and conditions of that program;
- misrepresented that consumers can cancel their continuity program membership at any time;
- caused charges to be submitted for payment for video/DVD shipments without the express informed consent of consumers;
- debited consumers checking accounts on a recurring basis without obtaining consumers written authorization for preauthorized electronic fund transfers from the accounts;
- shipped unordered merchandise to consumers and sent communications seeking payment for the unordered merchandise; and
- continued to ship unordered merchandise and to seek payment for the merchandise, even after they had actual knowledge that the FTC had determined that these practices are deceptive, unfair, and unlawful based on prior cease and desist orders against other companies.
In addition to seeking civil penalties and consumer redress, the complaint asks the court to bar the defendants from violating the FTC Act, the Electronic Fund Transfer Act, and the Unordered Merchandise Statute.
